•  Open Banking is an evolving concept and practice. It permits trusted third parties to access a consumer’s banking data to create innovative products and services.
• Open banking is the opening up of bank financial data, with consumer consent, to third parties, and is fundamentally changing the retail banking landscape across the globe. In India, too, open banking has made its presence felt through the government’s Unified Payments Interface (UPI).
• It has opened up a whole new world of opportunity for retailers, one that goes beyond mere marketing or advertising. For example Uber, wherein consumers can hail a cab, get to their destination, and get payments done seamlessly in one app via the wallet or through an online banking transaction. The Indian banking customer, who is enjoying world-class customer experience across sectors like retail, entertainment, ride hailing and travel, can look forward to the best in banking and fintech services.
• Every conversation a bank has with its (potential) customer is a business moment for it to create a memorable customer experience.Open banking converts such business moments into customer experiences by leveraging open APIs, the intelligent conduit that allows for the seamless flow of data using open source technologies.
• Beneficial to SMEs and their lending parties: It would enable lenders to obtain and analyse detailed transaction data for efficient credit assessments and accurate risk decisions. It also prevents preferential pricing and pre-emptive pricing leading to a fair price for the borrowing SMEs.
• Placing customers at the center of the value chain: Open banking has reengineered the banking landscape thusaccelerating the transparency, innovation and a greater choice for customers, thus driving banks, both incumbents and innovators alike, to place customers at the center of the value chain and henceadvancing a new era of customer centricity. This leads to data powered and personalised product offers which are attractively tailored to suit customer needs.

Open banking and the Elephant in the Room:

• The idea is to collate everything to a single glance screen to help you plan,save and budget your finances through an app. There are high possibilities of these FinTech apps being hacked. Who is liable – the banks or the third party apps? Finding the truth would be a lot of running around.
• There will be a lot of vulnerabilities and bugs leading to software patches and ‘improved’ versions. The users will never be aware of it. They will only know of the colorful branding and app designs. Even the FinTechs would not know of it unless it is illuminated by the hackers, thus darkening the lives of users, the unassuming lab rats.
• Consider the above problems with the eventual complexities like Joint account holders, Countries, Geographies and Laws of State, System maintenance. The problem then gets compounded. For instance, a system is vulnerable to hacks when under maintenance. This is when the hackers hound around the no man’s land. Somebody ploys a hack when all these organisations are under maintenance at the same time, now who is to blame?
• Align it with recent problems like Brexit and GDPR. Now it is problem squared. In countries like USA, each state law differs from the other and during a dispute, the state’s law holds more power than the center’s one. Now it is problem cubed.
• Now when the account holdee is in one country and functions his open banking services in another country, how do we account for this? How about Joint account holdees in different countries and/ or different citizens?
• Besides there is a gaping hole for criminal activities and black money hoarding. This is problem to the power of n, and so on, and so forth.
• We will be witness to a hoard of rash copy cat websites posing as the consenting third party app, with strikingly similar websites and app names. This is a challenge many will fall prey to. This is easy access to customer money.

Millennial Mindset and Regulatory Compliances – Change Gears!

• Open banking comes as a pleasantly surprising challenge, even to the millennial. People tend to take it with a grain of salt because of the abstract laws.
• Open Banking would give a competitive edge based on the bank’s ability to manage risks, compliance, and customer needs. Hence, Open Banking is certainly a benediction which would gain traction in no time.